Just Minor Tweaks to Wheat Supply-Demand Estimates

The USDA made relatively minor tweaks to its old- and new-crop U.S. wheat supply-demand estimates on Tuesday.

On the old-crop side, the USDA increased its export forecast by 25 million bu from last month, a move that resulted in an identical-sized reduction in projected ending stocks to 1.102 billion bu. Meanwhile, estimated new-crop ending stocks fell 69 million to 1.072 billion bu as a minor increase in expected production was more than offset by the smaller old-crop carryin and higher feed and residual use.

Going into today’s report, traders and analysts were anticipating nearly identical old- and new-crop wheat ending stocks of around 1.11 billion bu. Wheat futures were trading anywhere between 1 and 10 cents higher this afternoon, after the report’s release.

The USDA did raise its 2019 winter wheat production forecast by 6 million bu from last month to 1.274 billion, as an expected increase in Hard Red Winter output more than blunted projected declines in Soft Red and White. Total U.S. wheat production for 2019 is now forecast at 1.903 billion bu, up 5.8 million bu from the May forecast.

Total projected U.S. wheat exports for 2019-20 were unchanged from last month at 900 million bu but feed and residual use was raised 50 million bu to 140 million based on reduced projected corn supplies.

The new-crop season-average farm price for wheat was raised 40 cents/bu from last month to $5.10, reflecting sharply higher wheat futures prices and reduced 2019-20 corn supplies.

Global wheat production for 2019-20 was raised to 780.83 million tonnes this month, up from 777.43 million in May, mainly reflecting 1-million tonne increases in projected Russian and Ukrainian wheat output to 78 million and 29 million tonnes.

World wheat ending stocks for 2019-20 are pegged at 294.34 million tonnes, up from 293.01 million last month and 276.57 million in 2018-19.

Source: DePutter Publishing Ltd.

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